In New Jersey, drinkers may finally triumph uber the liquor cartel | Mulshine

In all my travels south of the Mexican border I have never come across a beach town, no matter how small, that lacked a store that would sell you a cold beer on the same terms as a cold soda.

The towns without electricity were actually the best. There, the beer-and-soda truck would deliver a huge block of ice with the beverages. If you reached down far enough, the beer would be so cold that it would freeze when you popped the cap.

Now, that is a fond memory.

Unfortunately I would eventually have to return to New Jersey. Here, you can buy soda openly, even though its dire effects on health have become known in recent years.

But the sale of beer requires the permission of a bureaucracy that would not have been out of place in countries behind what used to be known as the "Iron Curtain."

That term was coined by Winston Churchill after World War II, around the same time that an iron curtain descended on New Jersey's drinkers and retailers. In 1947, the holders of liquor licenses managed to buy enough legislators to attain passage of a law that created an artificial monopoly on liquor sales.

This had the effect of pushing up the value of the licenses to levels that can now exceed $1 million. And that has had the effect of stymieing the growth of the state's restaurant industry.

That may be about to change. For the first time since that iron curtain descended there appeared a rip in it. That occurred last week when an Assembly committee advanced a bill that would finally open up the alcoholic beverage industry to competition.

This was the first time in the memory of anyone I could find that the Legislature had gone against the wishes of the liquor cartel. Its members were in short supply at the hearing Thursday.

Never mind Mexico; even communist Cuba has a more open market in beer than New Jersey. This vending machine is on a street in Havana. Rick Shaftan

Meanwhile the committee members heard from a number of people who pointed out the many advantages that would flow from restoring a free market in alcoholic beverages.

More than one made a comparison to the Uber phenomenon in New York City. The taxi-medallion owners there had pulled the same stunt the liquor license-holders pulled here.

They limited the number of medallions to the point that their selling price rose as high as $1 million. Then Uber came along and those who rigged the market got burned.

Restaurant owners here want the same opportunity to compete on an equal basis with the members of the cartel. They may finally get it thanks to the efforts of Assemblyman John Burzichelli.

For years, the Gloucester County Democrat has been pushing a bill that would permit restaurant owners to sell alcoholic beverages to their customers freely, as is done in the civilized world. That was one of four bills opening up the alcoholic-beverage trade that passed out of committee.

The key argument that won the day was the role of restaurants as anchors for the sort of economic development so desperately needed now that retail stores are closing because of competition from the internet.

One couple who own a restaurant in Jersey City, and who brought along their baby for emotional impact, noted that New York never adopted New Jersey's practice of limiting liquor licenses. They said they had been living in Brooklyn when a boom in restaurants that serve drinks brought an economic revival.

Another couple who brought along a baby were Robert and Magdalena Pluta. They run Leonardo's restaurant in Lawrenceville just north of Trenton.

"The food costs are going up," Pluta told me. "It's hard to sell meatballs and linguini and make a profit. The mom-and-pop restaurants are struggling."

The members of the liquor cartel also like to talk about the "mom-and-pop" license-holders. But these days, "mom and pop" are the national chains, Pluta said.

"The last license in Lawrence Township went for $700,000," he said. "The Cheesecake Factory, Hooters, Applebee's - they're the only one who can afford this."

Pluta said there are a mere 11 licenses in a sprawling township of 33,000 people.

"In Lawrence, they're protecting 11 people at the expense of hundreds who are hoping to make a buck," he said of the current system.

The situation is similar in Fanwood, said Mayor Colleen Mahr. Mahr, who testified for the state League of Municipalities, said downtown redevelopment in her town is being held back because there are just two consumption licenses for 10,000 residents.

"We believe with redevelopment there should be an opportunity for the developers to have restaurants as a component and not be restricted by the liquor license laws," she said.

In plain English, it's about time we restored the free market in beer and wine.

In plain Spanish, too.

ALSO: I wasn't aware of this, but it turns out that Mexico is the leading beer exporter in the world. The Mexican beer industry was started by the Germans and was always quite healthy - thanks to a lack of the puritanical laws we have in the U.S. Then it got a big boost when the U.S. adopted Prohibition.

It's a sad state of affairs when a country generally not noted for promoting the free market is so far ahead of our state when it comes to a simple product like beer. But thanks to hacks in Trenton, that's the sad reality.

Assemblyman Brian Rumpf was the worst such hack at this hearing. Though he is a Republican from Ocean County - which is shortchanged on liquor licenses more than any other county - his questions were aimed at promoting the interests of the liquor cartel and not the public.

At one point Rumpf said, "Many existing license holders and restaurants are simply frightened out of their wits by this bill."

Well, that's what they get for rigging the market. By his logic, no government-created monopoly could ever be disbanded because the people who paid the legislators to create that monopoly might be adversely affected.

Rumpf also said at one point, "I don't see any limitations on the number of licenses?"

Why should there be? If some willing seller wants to sell beer to some willing buyer at a restaurant, why is it any business of his? We don't limit soda sales at restaurants. Why beer and wine?

The good news is that if this bill passes, the cartel may be weakened to the point where beer and wine can be sold in supermarkets and convenience stores - like in all those states that don't have corrupt legislatures.

When I drove to Florida a few months ago, I noted beer was sold in convenience stores in every state I passed through. Why is it such a heavy lift to have that simple freedom here?